Adelaide Partnerships Ltd & Ors v Danison & Ors

Dishonest assistance requires assistance in a fraudulent breach of trust and a dishonest state of mind. Dishonesty is assessed objectively by ordinary standards, while the defendant’s state of mind remains subjective. Suspicion combined with a conscious decision not to investigate may suffice.

Assistance may include establishing or operating destination accounts which facilitate the transfer or concealment of fraudulently obtained funds. Liability is limited to proceeds which passed through accounts in respect of which the defendant assisted. Tracing remedies and a personal remedy may be cumulative, so no election is required where there is no double recovery.

The claimants sought personal liability against Mrs Danison and Mr Horowitz for dishonest assistance and knowing receipt arising from an advance-fee fraud perpetrated principally by Mr Danison. Funds paid by victims into accounts controlled by Mr Danison were transferred to accounts associated with Mrs Danison, including the Isabella account and a Spanish account. Other funds passed through the Marvel Pride account operated by Mr Horowitz.

The court considered whether each defendant had the requisite knowledge and dishonest state of mind, whether their conduct constituted assistance or receipt, and the extent of any liability.

1. Mrs Danison. The court found that Mrs Danison’s evidence was deliberately misleading and that she knew sufficient about the accounts, the movement of funds and Mr Danison’s history to appreciate a substantial risk that the funds were illegitimately obtained. She deliberately closed her eyes to that possibility. Her participation was therefore dishonest according to ordinary standards.
2. Establishing and operating destination accounts can assist a fraudulent scheme by facilitating the transfer and laundering of funds and impeding tracing. Mrs Danison’s power of attorney and signing authority over the Isabella account, and her control of the Spanish account, constituted assistance.
3. Her liability was limited to money passing through accounts which she helped establish or operate. It therefore covered sums paid into the Isabella account and claimants’ money passing through the Bluebird and Marvel Pride accounts into the Spanish account. It did not extend to all sums paid into the Bluebird or GRA accounts.
4. The proprietary tracing claims and personal claims were cumulative remedies. Under Director of the Serious Fraud Office v Lexi [2008] EWCA Crim 1443, an election was unnecessary where tracing into mixed funds and a personal remedy were pursued, subject to credit for any recovery and no double recovery.
5. Mr Horowitz. The circumstances might have aroused suspicion, but they did not establish dishonesty or knowledge sufficient for knowing receipt. Compliance with applicable money-laundering requirements, absent a particular reason to suspect lack of bona fides, was sufficient on the evidence. The claims against him were dismissed.

First-instance judgment. The judgment refers to earlier criminal proceedings involving Mr Danison, but gives no citation for the related appellate decision.